Africa’s Secondary Cities: The New Frontier

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Many believe the future of urban Africa is in megacities like Lagos, but a mostly unremarkable eastern Nigerian town may also have a few things to say about where the continent is going and how to get there. If the discourse at Davos is anything to go by, the strident sense of ownership on display at the World Economic Forum session on “Africa’s Next Billion” suggests the continent has finally shrugged off its third-world label. Whether your buzzword of choice is BRICS, MINT or any of the others in global circulation, the underlying message is clear: old categories forged by Cold War politics no longer capture today’s economic realities and potentials. If you look past the hoopla about a rising continent, its high growth nations, there is less evidence of innovative thinking around where this growth can really happen. Attitudes towards African cities still display a preoccupation with the concept of “megacities,” and most of the talk focuses on economic and political capital cities. It overlooks the many small and mid-sized cities that make up the majority of Africa’s urban population and growth areas. It is natural that corporate executives with the birds-eye view from outside of Africa would allow themselves to be persuaded by this notion. Businesses certainly scale better in urban centres with certain conditions such as effective public institutions, adequate infrastructure, a large consumer base, market efficiency and security. Smaller towns and peripheral settlements generally do not fit this profile. Yet many smaller African cities that lie just off the radar are experiencing a quiet transformation, largely unnoticed by the press and outside the purview of big business and foreign investment. Take Enugu, a city in Enugu State, Nigeria as an example. Red-sanded and somewhat provincial, Enugu is by most measurements an ordinary city. A landlocked town of less than four million people, ushered into being by a now-defunct colonial coal mining industry, it is certainly not a place where you would expect much excitement. Nor would it make the list of important Nigerian cities – an honour generally reserved for the notorious megacity of Lagos, the oil-rich basin of Port Harcourt and the dazzling new capital of Abuja. Yet in less than three years, rental rates in Enugu have more than doubled; in some cases, the value of land has tripled. Local estate agents confirm that the annual rent for a standard three-bedroom flat in the city’s New Haven enclave – a medium-to-high density area mapped out in the 1960s – is around $3,078, up 150 percent since 2011. Why are residential properties that were acquired at $7,850 now valued at $48,300 less than half a decade later? And how can it be that several of Enugu’s highest-property-value neighbourhoods lie some distance from its urban core – in areas formerly perceived as outskirts, largely underdeveloped save for their newly tarred access roads? The city’s land and real estate market took off in 2011, the year its current administration, headed by lawyer-turned-politician Sullivan Chime, began an unprecedented and aggressive infrastructural development programme. Some 350-odd kilometers of road have been repaired and resurfaced in Enugu city and nearby Nsukka, and just under $120.8 million awarded in contract to do the same for 250 kilometres of roads in outlying areas. Unsurprisingly, works and infrastructure received the highest allocation of any area in Enugu’s 2014 public budget: a total of $94.2 million, amounting to 17 percent of the city’s total planned expenditure and up nearly 40 percent from the previous year. Development via infrastructure is hardly original. One need only look to the $1.2-billion Blue Line light rail project in Lagos; the upcoming 650-kilometre Ethio-Djibouti railway; and the mammoth $13.5-billion railway project linking Mombasa, Kampala and Kigali to see how similar dynamics might propel urban growth and reorder markets in cities across Africa. The steep rise in Enugu’s property values is not due to stiff construction costs, nor is it proportional to population growth figures. Terror in Nigeria’s north and a plague of kidnappings in nearby states has driven a wave of settlers to Enugu state. But relocation alone is not the only reason for the rise. The excess of demand over supply is largely driven not by local buyers but by external homeowners and hoteliers looking to cash in on new access to serviced land, a pumping nightlife scene and a budding tourism sector. The former administrative capital for the Eastern bloc, Enugu has always appealed to the region’s predominantly Igbo community as a place to own a second home for vacation or retirement. As rents skyrocket, so have traders, distributors and supermarkets all seen increased sales. Unsurprisingly, the property boom has juiced the growth of the construction sector, while estate managers and mortgage providers have also seen a tidy increase in business thanks to government- funded projects. Enugu’s recent strides forward can only be understood in the context of eastern Nigeria’s globalisation, as trade networks grow and develop between the region’s business moguls and their counterparts in India, China, South East Asia and the US. As the dissenter’s corner in Nigeria’s civil war, the east suffered economic and political disenfranchisement in the aftermath and many of the region’s people had no choice but to rely on personal contacts and familial bonds for their livelihoods. Unlike the networks that link the Mourides of Senegal and the Gambia, the resulting connections did not carry the weight of religious or ideological precepts. Instead, a hard-nosed, apprentice-to-business-partner model soon outgrew ties of kinship, propelling business expansion across commodities and sectors. However, despite a thriving real estate market with few geographical constraints on its expansion, Enugu has not emerged as a friendly environment for all businesses. Manufacturing firms based in the city pay 24 independent taxes, while at least five separate state and federal entities police and regulate them. The result is bureaucratic red tape and lower returns compelling a knee-jerk reaction from local entrepreneurs who prefer to source goods from overseas. Retail chain growth has also been sluggish until recently; in September 2011, the Persianas Group opened Nigeria’s biggest shopping mall in Enugu city, in partnership with the government of Enugu state. The lack of a port or strategic waterway has also limited the city’s potential as a major import base, while the size of its informal trading networks betrays uneven business regulation and application of customs fees. Yet with whispers in the air of a free trade zone and the internationalisation of the local Akanu Ibiam Airport, trade, tourism and industrialisation in Enugu are all likely to rise. The China Civil Engineering Construction Company (CCECC)’s work on the airport is due to finish in 2015, though there has already been significant increase in passenger traffic. Ethiopian Airlines now operates four connecting flights weekly to various destinations, including Beijing and Dubai, and KLM is bidding hard for a hanger. Enugu’s decision makers will need to build local capacity and negotiate attractive public-private partnerships to capitalise on the growing flow of people and various sectors.

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